Charity sues over legacy of dot-com

He was a local boy done dot-com good, a young, self-taught tech whiz who helped turn a son-and-pop Concord software firm into what for a time became the fastest-growing Nasdaq company ever.

Thomas Gonzales Jr. and his father helped launch Commerce One into a Pleasanton-based Internet high-flier. He cruised in fancy sports cars and sleek jets and, along the way, quietly gave time and money to local charitable causes.

When he died of a rare cancer at age 35 in 2001, Gonzales Jr. left millions of dollars to be placed in trusts, much of it for the East Bay Community Foundation to distribute to charitable causes throughout Alameda and Contra Costa counties.

But, according to allegations in a lawsuit filed Wednesday in Contra Costa County, his father's avarice has stymied those designs.

In a 60-page complaint, the charitable foundation alleges that Tom Gonzales has misspent or hidden big chunks of an estate valued at more than $90 million and failed to fund a trust designed to help the East Bay's needy.

The father could not be reached Wednesday. His lawyer, Harvey Stein, said he could not comment on the lawsuit before reaching Gonzales, who he said was out of state.

At stake, the lawsuit claims, is $23 million or more that the foundation should have received by now. Instead, only$239,000 has come in, according to the foundation's attorneys.

"After Thomas' death," the lawsuit claims, "paternal greed has cast a shadow over his charitable legacy.

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As executor of his son's will and the trustee overseeing most of those assets, Tom Gonzales has instead ladled money on himself, family and friends, hidden assets of his son's estate and failed to give the foundation proof of where the money went, the lawsuit claims.

Among the assets is a stake in the sale of 45 acres of prime land near the Las Vegas strip.

Tom Gonzales owns property in Incline Village, Nev., Fort Lauderdale, Fla. and in Walnut Creek. He reportedly listed the 4.5-acre Incline Village property a few years ago for $60 million. Last year, he reportedly agreed to buy a Fort Lauderdale condo listed at $11 million.

The father-son team started DistriVision Development Corp. in 1994 and caught one of the burliest Internet waves on software linking buyers and sellers over the Internet.

Both taught themselves to use computers. Gonzales Jr. moved to the Bay Area at age 17 without a high school diploma and enrolled at Diablo Valley College. He later attended UC Berkeley before leaving just short of a degree in microbiology to work with his father.

Before his death, Gonzales Jr. was senior vice president and chief technology officer for the Pleasanton-based company. Even before their riches, the father and son would fill trucks with food and toys and deliver them to families around Christmas.

"Sharing his good fortune with others was part of the family creed," Tom Gonzales told the Times shortly after his son's death. "We had some humble beginnings, and we believe in helping other people and never forgetting where we came from."

Gonzales Jr., who lived in Danville, set up a foundation a month before his death, as a subsidiary to the East Bay Community Foundation. The 79-year-old foundation manages and invests about $285 million in charitable funds, and expects to deliver more than $30 million in grants this year, said spokesman John Patchner.

"It is fair to say this is among the larger single donations" pledged to the foundation, Patchner said of the bequest.

The lawsuit came after the two sides could not reach an agreement outside court, said San Francisco attorney Niall McCarthy, who represents the foundation.

The lightning fast rise of Commerce One had waned by the time Gonzales, Jr. died. Like many Internet pioneers, the company hit hard against economic realism. The company imploded and filed for bankruptcy in 2004. Dozens of its prized patents were later auctioned off.